Plenary, 12 Feb 2004

Meeting date: Thursday, February 12, 2004

Official Report 704KB pdf

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Budget (Scotland) Bill

The next item of business is consideration of stage 3 of the Budget (Scotland) Bill. As there are no amendments to the bill, we will move to the general debate on motion S2M-902, in the name of Andy Kerr, that the Budget (Scotland) Bill be passed.

Today, Parliament reaches the end of a long road that started right back in September 2002 when the Minister for Finance and Public Services announced in the chamber the results of the previous spending review. That was the first time that we discussed outline spending plans for 2004-05 in the Parliament.

More detailed consideration started last September, with the publication of the draft budget for next year. All the subject committees discussed the plans relevant to their interests through the autumn. Parliament then debated the Finance Committee's stage 2 report before Christmas. Last month, we debated stage 1 of the bill and I was disappointed that I missed the debate due to snow in Shetland. Some colleagues have been fortunate enough to discuss the bill further with me at stage 2 in the Finance Committee, under Mr McNulty's convenership, earlier this week.

I can understand it if members greet the end of the process with relief. However, I must tell them that, within the Executive, work has begun on the next spending review. The process for the 2005 Budget Bill will start as early as next month with the publication of the new-look annual expenditure report. Having reached the end of one long road, we must start off down another.

None of that is to play down the importance of the budget cycle. During the stage 1 debate, members of all parties underlined the fact that it is perhaps the most important part of parliamentary business. The key to the devolution settlement is the Parliament's power to determine how to spend our resources in line with our priorities. However, the importance lies with the whole budget process throughout the year, not just with today's debate, which brings it to a formal conclusion.

Andy Kerr's opening speech in the stage 1 debate indicated the major changes to the plans in the bill compared with those that the committees considered when examining the draft budget. The most significant of those arise from the introduction of the prudential regime and an accounting adjustment to change the way we reflect pension liabilities. I certainly recognise Stewart Stevenson's considerable knowledge of financial reporting standard 17—a tome with which not all are as familiar as is he.

The work on the next spending review that is already under way within the Executive will come to a head in September, when we announce spending plans for 2005-06, 2006-07 and 2007-08.

The great strength of our budget process is that the Parliament and the committees have such a central part to play in it. Given that the annual budget process largely seeks parliamentary approval for plans agreed in the spending review, it is important that the Parliament and the committees are taken into account as much in the spending review as in the budget process itself.

Given that we are likely to know the consequences of the Westminster Higher Education Bill by the time the spending review comes out in the autumn, will the minister assure us that Scotland's higher education institutions will not be disadvantaged in any way and that they will be given a high priority in the spending plans in the next spending round?

I am sure that Mr Adam has heard the First Minister, the Deputy First Minister and a number of other ministers refer to the spending review and what the process that is under way south of the border might mean for Scotland. I certainly assure him that the higher education sector, which is crucial to the future of the Scottish economy and Scotland in general, is very much central to that process and that those matters will most certainly be considered over the coming months.

We have been discussing with the Finance Committee changes to the budget process to make sure that there is parliamentary approval for the plans. However, the current process is not perfect. I am most grateful to the Finance Committee for keeping ministers on their toes and for the constructive way in which members continue to suggest further improvements.

I am also grateful to the committee for the recognition in its stage 2 report that the Executive has a good track record in responding positively to its recommendations. I hope that, in the coming months, we will be able to offer the committee and the Parliament news of further progress on both capital spending and 10-year trend data, which are subjects that are particularly dear to committee members such as Wendy Alexander and Jim Mather. I look forward to discussing those matters again.

Improving the budget process needs commitment not only from the Executive but from the Parliament and the committees. I hope that each of the committees will take the spending review fully into account during stage 1 of the budget process, which will happen after Easter. I look forward to hearing the results of their deliberations in the Finance Committee's stage 1 debate in June.

Members will know that in the partnership agreement we have already set out a programme for the lifetime of this Parliament. That will be central to determining the spending proposals for the next three years that we will bring forward in September. Our priorities will remain delivering excellent public services; supporting stronger, safer communities; developing a confident, democratic Scotland; and, above all, growing Scotland's economy. In that light, I will set out some of the many initiatives that we are taking to help the growth of the Scottish economy.

This Government is addressing fundamentals such as lifelong learning, skills, innovation and entrepreneurship. We will invest in Scotland's physical and electronic infrastructure, because those components of economic viability must be fit for the 21st century. The Government will work with Scottish businesses large and small, from start-up to world leader, from Lerwick to East Kilbride to ensure that our focus never wavers from assisting business and company growth.

That approach is paying off. The most recent business surveys from the Royal Bank of Scotland, Lloyds TSB and the Scottish Chambers of Commerce for the fourth quarter of 2003 all confirm encouraging increases in business activity. Moreover, the Ernst and Young ITEM Club most recently concluded that manufacturing growth in the UK will match growth in gross domestic product for the first time in a decade.

A specific example of how we are taking this matter forward is the new innovation-related initiative that Jim Wallace recently announced. The initiative is designed to encourage many more small and medium-sized enterprises to link up with universities and other institutions to help them to innovate.

Another example is the Executive's support for the new intermediary technology institutes. Backed by a long-term Government commitment of up to £450 million over the next 10 years, all three ITIs—covering energy, life sciences and technical media—are now up and running. As members will see, that commitment is over a considerable period of time and is an important illustration of this Administration's concentration on the long term and the importance of such an approach to investment.

The Budget (Scotland) Bill takes forward our work on ensuring that the infrastructure to support economic growth is fully in place. Of course, transport is central to growing the Scottish economy and our annual spending in that area will rise to more than £1 billion a year by 2005-06.

Our investment in broadband and digital technology is vital to increasing economic productivity. The Government's target of 70 per cent broadband coverage—principally ADSL—for Scotland has already been met. That target was met well ahead of schedule.

Will the minister explain the information that was provided in a recent parliamentary answer, which shows that, in one year, the number of Scottish businesses that provide services via the internet has dropped by a third?

I would be happy to look into that, if what Mr Stevenson suggests proves to be the case.

The figures illustrate that the work that the Executive is doing on broadband with the private sector is making considerable progress. We will continue to work in that area with what I believe is considerable success.

In speaking to the motion, I have demonstrated that growing the Scottish economy is central to the bill in front of us. I commend the Budget (Scotland) Bill to the chamber.

I move,

That the Parliament agrees that the Budget (Scotland) Bill be passed.

Today, the Parliament moves its consideration of the budget on to stage 3 although, as we and others have said on previous occasions, it is in reality only a list of spending commitments. The budget process has exposed shortcomings in the way in which the Executive communicates its spending plans. The budget documentation is still hard to read and assimilate and it is difficult to reconcile it with the Executive's stated policy priorities.

The Executive has missed an opportunity to break the mould created in another Parliament. It has yet to present a budget in a clear and comprehensive way. Sadly, not only has that opportunity been missed, but the budget has failed to involve and engage the Scottish electorate. A truly accessible budget with clear cross-references and reconciled cross-additions would have given people a simple way of drilling down through the schedules and understanding the sums being spent at a local level or in their own areas of interest. That would have made a real difference.

Mr Mather talks about accessibility. Does he not accept that, since devolution, ministers with responsibility for finance have purposely, as part of the budget process, taken the budget to all the airts and pairts of Scotland? That opening up of the budget process has allowed real people—dare I say that?—to be involved in the process and has now been built into our budget deliberations.

I recognise that and I recognise that some say that there have been improvements. However, those improvements are not happening fast enough and are not radical enough. If, at a portfolio summary level, the Executive had been able to give historical data showing spending over time in major areas of expenditure, and if that had been matched against major outcomes—such as population movement, growth, and national competitiveness—there would have been much more engagement. However, that has not happened. In respect of that latter omission, the Scottish Executive has neglected to do what any commercial organisation that valued accountability to its stakeholders would have done. Any company that was spending shareholders' money would be bending over backwards to explain exactly what its expenditure had bought and to explain any increase in turnover, market share, profits or share values. Surely taxpayers deserve the same treatment and to be offered similar explanations and reassurances that the Scottish Government means what it says about accountability and transparency, and is serious about improving overall performance—especially when the Government in question is not burdened by the need to levy taxes, manage borrowing or set and achieve growth targets.

The shortcomings and omissions in the reporting are significant as there are plenty of good role models to emulate and plenty of easily identifiable macro-targets that are meaningful and that touch the lives of most people in Scotland. That is disconcerting when we consider how the Government, in its approach to the budget, fails to highlight the overall lack of focus on competitiveness—especially when we are destined to trade with and compete with every other national and regional economy on the planet. Surely, with a post-FRS 17 adjusted spend of some £25 billion, we are entitled to have a clear focus on the big outcome numbers that dictate whether there will be worthwhile jobs for our children, whether our earnings will continue to fall behind those in other economies, and whether our population will continue to decline.

I accept Jim Mather's point on the importance of competitiveness and on the Government's focus on growth, but does he not accept that Governments are different from companies? Some of the expenditure that the Government necessarily makes—for example, much of the expenditure on care for old-age pensioners—is not necessarily driven towards economic targets or goals and does not deliver greater competitiveness, but it is the right thing to do. In that sense, we have to take a broader perspective when it comes to Government expenditure than we would in a commercial setting.

In both cases, there is an agenda of pushing the common good; I think that Mr McNulty can see what I mean.

The agenda here is that there seems to be a tendency to laud spending and ignore outcomes because, after all, our competitor nations have more autonomy and they are more likely to create a gravitational pull that retains wealth, builds infrastructure and retains skilled people. We face the continuing spectacle of the Scottish people and this Parliament being subjected to a budget process that merely celebrates spending for spending's sake and which considers spending to be an end in itself. That is in spite of the fact that Donald Dewar is on record as saying that the Parliament is not an end in itself but a means to ends. We are still waiting.

In the meantime, we have the farce of a situation in which the Executive and its apologists appear increasingly content to slice a more and more finite cake, the distribution of which never seems to be able to allow the people of Scotland to match the living standards of those in other western European countries. The Executive is even starting to factor in its failure to deliver on important targets, such as stabilising our population or creating the conditions for real economic growth, in order to manipulate the data and gild its increasingly tarnished performance.

Will the member take an intervention?

I have taken enough interventions.

For example, spending is being recalculated on the basis of a diminished head count—after people have voted with their feet—to bolster per capita spending and GDP per capita. GDP data are being restated so that we can move to a new reality that simply downgrades and buries industries that have contracted because of the erosion of competitiveness; such industries have never been supported here to the extent that they have been supported by Governments elsewhere.

I must hurry you.

When unemployment data have been announced, no attempt has been made to acknowledge the fact that many people have been compelled to move within the union for want of local opportunity.

Therefore, on the budget, I must tell the Executive that I am not alone in craving more information, more trend data, more cross-additions, more reconciliations and more cross-references.

I shall not be taking interventions, as there is not enough time.

Today is an important day for the economy of Scotland, not just because we are deliberating on the third and final stage of the Budget (Scotland) Bill but because of that bill's impact on local authorities that are setting their council tax levels today—the coincidence is ironic.

The Scottish Government's budget covers many areas and some of those, such as health and enterprise, were tackled by Conservative members in the stage 1 debate. Because of the lack of time, I will leave to my colleagues those areas that I do not cover. I wish to speak about two subjects. The first is the funding of local councils, which accounts for one of the largest proportions of the budget's allocation—some £7.6 billion goes on aggregate external finance. The second is our economy. In spite of ministers' happy, shiny faces today, we still have serious problems.

I want to correct two points on local councils. The Minister for Finance and Public Services and his deputy have put about the suggestion that Scottish increases in council tax compare well with those in England, because Tory councils have proposed far larger increases than their Labour colleagues have. I do not deny that there are some examples of that, but that is not the whole story. The truth is that the contorted—or rather, distorted—funding formula that Labour introduced in England has penalised many Tory-run councils and forced them to raise council tax further than they would have liked; indeed, it has penalised many Liberal-run councils as well. There is the rub. At Westminster, the Liberals blame the Labour central Government. What is the truth? Andy Kerr blames the Tories, while Tavish Scott's colleagues blame Labour. I rather suspect that the deputy minister has yet again shown that he would rather sleep with the enemy than join his colleagues in the real fight.

Secondly, I want to correct the assertion that the council tax has not gone up by 42 per cent since 1997. I remind Parliament that Labour proudly stated its commitment to the Tory spending plans for its first two years in government and, by implication, it accepted the local government settlement at that time. It could have pumped more money into councils and provided a council tax relief or it could have changed the settlement the following year to offset the increase in council tax, but it did neither.

The Tories may have set the level of council tax for 1997-98, but Labour accepted it. By the inclusion of that statistic Labour shall be judged. The comparison must be made with the council tax of 1996-97, which was the last year in which Labour was unable to change the settlement. That comparison shows a 42 per cent increase; by tomorrow, the figure will be 47 per cent.

To touch on the economy—

You have one minute. [Laughter.]

I have allowed for that.

Because of the recalibrated economic statistics that have allowed ministers to come over all smug today, when we look back at our economy, we will not now be comparing oranges with oranges, but oranges with lemons, which is an especially bitter and pointless exercise. However much ministers crow, there is a sting in the tail. The very fact that the figures have been recalibrated within such a short time illustrates precisely what I and critics from other parties have been saying all along: that our engineering and manufacturing sectors are experiencing serious decline and that only the service sector is pulling us through. It must be said that the service sector is riding on the back of the wild stallion of property inflation. A day will come when the rider will be thrown and our economy will falter.

If we are to avoid those perils, we need a broader approach through which all sectors can prosper. As Professor Ed Glaeser outlined this week, we need more business-friendly regulations and, as Professor Sir Donald MacKay has argued, we need a serious cut in business rates. The Administration and the Budget Bill will achieve neither and, for that reason, they stand condemned.

Like Brian Monteith, I was struck by the coincidence that the bill is being debated on the same day as local councils set their rates of council tax. As has been observed in previous debates, tonight's and tomorrow's newspapers will be full of headlines about councils and council tax, but probably none of them will run a story about the Budget Bill. I do not think that anybody will remark on the £21.6 billion cash authorisation for the Scottish Administration or that the much-maligned Scottish Parliamentary Corporate Body's budget for next year will be £87.7 million. The budget's headline figures are provided in the broad-brush breakdown in schedule 1 to the bill.

Although I recognise that only ministers can amend the bill, it is important that parties that condemn the bill and the Executive produce alternatives, at least for the people. The Opposition has not only a duty to oppose but a duty to provide alternatives. I am waiting to see what the major Opposition parties' alternatives are. Perhaps members of those parties would like to enlighten us at some point, not necessarily in this debate, about how they would do things differently.

As I said, the legislation that we will pass today contains headline figures. The minister referred to a new-look annual expenditure report and suggested that he is keen to work with the Finance Committee on the desire that we have for timeline data, which would allow us to reconcile spending with the Executive's priorities. I recognise that expenditure is not the whole story. Ministers have rightly said that it is outcomes not inputs that matter. However, we need that information to allow us to judge whether money is being spent effectively. I recognise that smaller sums targeted in particular areas may well do more to achieve the Executive's main priorities than large amounts of money that are not as well spent will. I do not for one minute accuse the Executive of not spending its money well.

I was surprised to see in the draft budget that the contingency fund is a modest £58.37 million for the forthcoming year. Of course, that is a prudent measure, as things with which the Executive has to deal might be around the corner. Unforeseen payments would otherwise have to be funded by dipping into departmental budgets. However, I was surprised by how modest the sum was compared with Dumfries and Galloway Council's reserves, which stand at £14.5 million, even though the council still finds it necessary to have a council tax increase that is above the rate of inflation. I noted that the same contingency fund was £120 million the year before and is expected to go up to £180 million the year after. I wondered what the relevant payments are and where the judgment that that figure should stand at £180 million in the future came from.

Schedule 5 indicates that Scottish Water has been allocated a borrowing consent of £241.9 million. Ministers are well aware, following discussions with the Finance Committee, that Scottish Water borrowed only £51 million in its first year of operation. There is concern about the fact that Scottish Water is not using its full borrowing levels. To refer to something that was mentioned in the Finance Committee on Tuesday, I am a bit concerned about the fact that £85 million of borrowing consent appeared to be returned to the Executive in the spring revision and then reallocated to health for a reduction in waiting lists. Therefore, a capital consent somehow became revenue spend.

Overall, I welcome the Budget (Scotland) Bill, and it is important that we pass it today, because it enables all those agencies, councils and health boards that are dependent on the Scottish Executive to continue to function and to fund the services that they provide.

I thank Tavish Scott for his congratulations on my interest in FRS 17. That is perhaps because I am slightly closer to retirement than he is. He indicated to the Finance Committee this week that he could spend

"up to £50 million"

from his contingency fund

"without coming to Parliament first".—[Official Report, Finance Committee, 10 February 2004; c 973.]

Perhaps he could approach Granada television to try and do a deal to get some questions on the subject of FRS 17 in "University Challenge".

Ha!

Thank you, Jamie.

In the same meeting, it was made clear that we have had continuing difficulties getting realistic trend data. Wendy Alexander said:

"we need to set a good example by ensuring that we have comprehensive statistics in Scotland."—[Official Report, Finance Committee, 10 February 2004; c 979.]

That neatly segues into the debate about GDP, and about the restatement and the baselining that have taken place recently. It also opens up the argument about how effective the new baseline is in giving us a real indication of what is happening in our economy. Interest rates are rising: we have a rate of 4.5 per cent, while the rate is down at around 2 per cent in the European Union. In the United States, it is 1 per cent. That makes things quite difficult for business.

Let us move beyond macroeconomics and consider how our budgets affect people in the real world. In a previous debate this afternoon, Allan Wilson said that Labour wishes to reward the many, not the few. However, parliamentary written answer S2W-5627 tells me that, under Labour, people earning over £40,000 will, between them, make about £5.6 billion or substantially more. Under the current Executive, people earning under £5,000 a year will make substantially less than £4 billion. The trend figures from 1996 suggest that the disparities in our society, as measured on the top and bottom levels of the table contained in the written answer to which I referred, have increased, with inequality growing by about 400 per cent. That is hardly a ringing endorsement of the Executive's policies and its stewardship of our money.

I received a parliamentary answer on the subject of bankruptcies in the past couple of weeks. It indicates that, between 1997 and 2003, there was a rise in the number of bankruptcies from 2,534 a year to 3,363—a rise of a third. Perhaps small businesses, which account for 98 per cent of all businesses and which are at the very heart of our economy, are doing well. In fact, the number of VAT registrations has been falling over the period since Labour came to power; the number of VAT deregistrations has been rising. Those are very serious issues for us all.

I will close by asking about a specific issue that relates to my parliamentary constituency and my own interests. In the Finance Committee this week, Tavish Scott referred to

"modernising the prison estate over the next five to 10 years."—[Official Report, Finance Committee, 10 February 2004; c 986.]

I welcome hearing from the minister that there will, in fact, be further proposals to assist the Scottish Prison Service to modernise within that time frame.

Alasdair Morgan said in last year's stage 3 debate on the budget:

"I have said before that I think that the budget documents are becoming much more helpful to members. They are a great improvement on what they were some years ago."—[Official Report, 13 February 2003; c 18236.]

That is contrary to Jim Mather's view. It is worth recognising that ministers have again responded to the Finance Committee's recommendations for changes in the budget process.

Something can get better but still be capable of significant improvement.

Indeed, and the substance of what I will say concerns suggestions about how the process can be improved. The process has been open and I hope that it will be more open in the future.

Before I come to substantive points on the budget, I would like to deal with the processes as we near the end of this year's budgetary cycle. I found myself in a considerable state of agreement with much of what Brian Monteith said during the stage 1 debate—although not with what he has said in today's debate. I accept that that is a disorienting place in which to find oneself. Mr Monteith made a good case for the budget process being more of an event in parliamentary life. Between my meetings yesterday morning, a taxi driver spoke to me about the football debate in the Parliament. He complained on two grounds: first, he complained that the Parliament has no powers relating to how football is managed; and secondly, he complained that, as a bowls player, his sport receives considerably less financial backing than football does. At least the debate stimulated a debate. I doubt that passengers in the fleet of black cabs this morning were exercised by lively discussions about our budget debate this afternoon. How the Executive spends the consolidated fund and the areas in which the Parliament scrutinises it should be part of public political discourse. I hope that there is an opportunity to reconsider how we conduct the process to stimulate wider debate.

I acknowledge that the Conservatives sought to have a reasoned amendment debated at stage 1. It would have been good to have an opportunity to consider the areas in which there will be increased spending, which were the very areas that Brian Monteith recognised and welcomed at the Finance Committee meeting on Tuesday. It would also be interesting to know in what areas the Conservatives would freeze spending and cut money to pay for their tax cuts. Indeed, in the stage 1 debate, Mr Monteith's colleague Murdo Fraser, who is in the chamber, stated that Tory economic policy is now top-down Reaganomics. However, he did not allude to areas in which public spending would have to be cut. I mention only in passing that members have the benefit neither of the SNP's alternative spending plans, nor of knowing how it expects its economic policy of cutting taxes and making spending pledges to stack up.

On the substance of the bill, I readily acknowledge that the budget for 2004-05 will be just shy of £24 billion, which represents a further major increase in spending ability. We must ensure that the increased capacity to spend is reflected in a determined improvement in services. I have spoken before in the chamber and in the committee about the need for a cultural shift away from an obsession with quantitative outputs towards scrutinising qualitative outcomes. That the United Kingdom Department of Health has just this week decided to go down that route is interesting. I hope that the Health Committee will have an opportunity to consider the consultation paper that the Department of Health launched this week and the Scottish Executive's approach.

The UK Secretary of State for Health neatly summed up the aim of the targets after reforms when he said:

"They are designed to enable the overall quality of health care to rise as the additional resources being invested in the NHS take effect."

Those should be the Parliament's wishes. In the next budget process, which will begin later this year, I hope that that will be the focus of our attention.

According to a recent report in The Sunday Times, in the five-year period from devolution to 2005-06, Scottish public spending will have soared by 73 per cent, which is almost a third more than will be the case south of the border, where it will have risen by 51 per cent over the same period. Compared with in 1999, 30,000 more people now work in the public sector in Scotland. Business start-ups have reduced by 25 per cent in that period and, since Labour came to power in 1997, bankruptcies have soared by 27 per cent. Those are the classic symptoms of low growth, as economists Donald MacRae and Peter Wood pointed out in separate submissions to the Finance Committee on this year's budget.

Despite today's miraculously massaged growth figures and Wendy Alexander's understandable attempts to grab some historical credit for them, the private sector of the Scottish economy is still growing at a far slower rate than the economy in the rest of the UK. In response to Tavish Scott's assertion that, according to some Royal Bank of Scotland league tables, we are improving, I say that Scotland comes 11th out of 12 UK regions in the Royal Bank of Scotland's purchasing managers report. We are not doing too well there.

The Conservatives recognise the assertion by Ian McMillan of the Confederation of British Industry, that although

"the Scottish executive has a social agenda … the war on poverty and social exclusion can be won only if Scotland has a competitive and growing economy."

The fact is that this budget is likely to make Scotland more rather than less dependent on the public sector.

It is difficult to be optimistic about any sector of the Scottish economy. Our manufacturing base has been steadily eroded; electronics has been a disappointment; and the oil industry is now declining. Until recently, the Executive was still able to point to the financial sector as the one bright spot but, following the problems of Standard Life and others, Scotland's proud record of financial innovation and prudence looks as though it is built on far flimsier foundations than anyone had realised.

Would not the member regard as a bright spot the fact that, in the past four quarters, the Scottish economy has outperformed the G7, the euro zone and the euro 15? Can he explain his remarks about wonderfully massaged figures in referring to the European methodology that is now applied to Scotland?

I am sure that that is what Wendy Alexander was referring to this morning, but about half a dozen people to whom I spoke after reading the figures said that that was so much hogwash. I look forward to seeing where that ends up.

It is depressing that Scotland is increasingly being bailed out by Westminster. The so-called Barnett squeeze, which was supposed to see public spending in Scotland converge with that south of the border, simply is not working. Every Scot gets £1,234 a year more public money spent on him or her than do our counterparts south of the border.

Will the member take an intervention?

I cannot take any more interventions.

Yet, hospital waiting lists continue to grow and our schoolchildren appear to know less and less. As Scotland continues to haemorrhage people, those who remain find themselves increasingly locked into a dependency culture. The coalition appears to believe that it is the job of the state to run the economy, rather than the job of businessmen and businesswomen, despite the fact that, with two possible exceptions, Jack McConnell's top team comprises people who have absolutely no experience of running a business and to whom profit often seems a dirty word.

In his speech during the stage 1 debate, the convener of the Finance Committee, Des McNulty, heaped praise on the budget for

"very substantial increases in spending across the range of portfolios."—[Official Report, 29 January 2004; c 5386.]

Spending is certainly budgeted to increase by nearly 9 per cent over 2003-04; however, with such a period of sustained growth in the public sector, is it really justifiable to throw another £592 million of end-year flexibility windfall money into the brimming pot over the next year? The truth is that, although public spending continues to soar, Scotland is living on handouts. Is that what the proud entrepreneurial nation that produced the likes of Andrew Carnegie, William Young, Alexander Leith and William Burrell is reduced to?

The recent Burns season is still close enough for us to recall the poet's words in "To a Mouse". He could have been referring to this budget when he wrote:

"But Och! I backward cast my e'e,
On prospects drear!
An' forward, tho' I canna see,
I guess an' fear!"

I call Wendy Alexander and remind her that she has only four minutes.

In that case, tempting though it is for me to pursue today's growth figures, I will turn to the budget debate. I want to pick up a theme that has been raised by both my colleagues, Elaine Murray and Jeremy Purvis.

I wanted to entitle my remarks "The Great Escape", not simply because the Minister for Finance and Public Services—who is not gracing us with his presence today—bears a passing resemblance to Steve McQueen, but because today is a great escape from some pretty daft ideas. The election in May might seem a distant memory, but if other members had triumphed it could all have been very different in the final stages of Scotland's budget.

Imagine if, in May, Tommy's Trots had sneaked into a colourful coalition and cornered the finance ministry. If that had happened, today's centrepiece would be not the growth of the Scottish economy but Chancellor Sheridan's announcement of which of his colleagues—who, I notice, cannot even turn up to the chamber—would be running the banks, managing Scottish oil and running our power stations, which would all have been nationalised without compensation. That might reverse the recent growth performance.

That is Scotland's first great escape. Next, imagine if we had Budget Ballard. What would those cuddly Greens be up to in today's budget? I suspect that the talk of the town tonight would have been the cancellation of the extension to the M74, the M8 upgrade and the Aberdeen ring road, but the centrepiece of the budget would have been the introduction of a citizens income scheme. The Greens would have announced that, from this date, every citizen would receive an income. I think that that would leave thousands turning pea green. We have made a great escape from the Green nirvana.

I mention those two parties because the smaller parties are quick to condemn the budget but, as others have said, they are much slower to showcase their own policies—no wonder.

Let me turn to the serious alternative parties. What would it mean if Finance Minister Monteith had triumphed in May? As some might recall, the Tories' May election manifesto was entitled, "Time to do something about it". That rather begged the question: time to do something about what? I venture to suggest that, if Mr Monteith had triumphed, we would have been discussing the introduction of health vouchers. About that measure, their manifesto says:

"health care could be purchased from any provider whether in the public or independent sectors."

There is no mention of the fate of the Scots who are not in a position to purchase from the private sector. Tory voters in May were either planning to stay extremely healthy or to get rich extremely quickly.

Of course, it might not have been wise to have been a Tory in May if one wanted to use a library, live in a council house or even have cleaner streets because, if the Tories are to be believed—and that is a big "if"—we would be freezing council tax, which would result in real-terms cuts in every council budget. They just do not learn, do they?

All that goes to explain why neither Finance Fergus—who is not here today either—nor Minister Mather seemed an attractive bet for some Scots. The SNP has learned to be circumspect in its manifestos about the things that actually matter—foremost among those things, of course, being finance. We search in vain in the SNP manifesto for mention of the words "full fiscal freedom", but I invite the chamber to ponder what today would have been like if we had been hearing about the first budget of a nation preparing for statehood. Today would have been all about saving for our sovereignty. It would be to do with finding the cash to pay for the defence force, the foreign office, the overseas development department—the list goes on. That is the fourth of Scotland's great escapes.

The SNP would tell us not to worry about that, as we would have the oil flowing. Here I return to a slightly familiar theme. Every published SNP budget relies on oil to balance the books. I am, of course, on a mission to get the SNP finance team to disown that fiscal folly because whatever Finance Fergus could control, he could not control the international oil price. Possessing oil does not present a country with an unsolvable conundrum, but no nation with significant oil reserves can rely on them to balance the books. If we did so, we could no more guarantee the future of the Scottish health service than we could predict future oil prices.

Today represents a great escape from some pretty daft decisions. The partnership agreement has delivered what it promised: popular, ambitious and fair measures, and I commend them to the chamber.

I will let the other parties defend themselves from Wendy Alexander's attacks but I point out to her that people in Scotland already pay for the defence force, the Foreign Office and every other reserved matter. The problem is that we do not get value for money in return. Very few of the jobs related to those areas exist in Scotland, which scores against us. Further, on funding things from our oil wealth, the UK Exchequer has squandered that money for the past 20 or 30 years. The money has been spent not to the benefit but to the detriment of Scotland. I hope that Ms Alexander will bear that in mind the next time she talks about her fantasies. I suggest that her fantasies might be better applied to an area other than economics. In spite of her much-vaunted credentials, I do not think that she has displayed much today that would commend her thoughts to the population at large.

Labour and Liberal Democrat members have today made their usual speeches about the budget process. I am delighted to say that they have been more temperate than usual. It is fairly obvious that the Liberal spokesperson, Jeremy Purvis, has examined closely what George Lyon and Iain Smith have said and I commend him for saying more temperately what has been said in the past.

Nevertheless, the process was designed to be difficult to amend. Probably the most important comment from the Labour spokesperson, Elaine Murray, was that local government is setting council taxes today. Tomorrow, the public and the press will be interested in how much council tax they will pay and which services will be cut. That shows the Parliament's weakness.

Will the member give way?

No, thank you. I noticed that Bristow Muldoon's replacement in the debate did not make the usual attacks, which I have no interest in hearing again.

The process provides little access to details. About a third of the budget goes to local government, but we have few ways of going into the detail of and scrutinising that. In the city that I represent, considerable concern is felt because the per capita grant is so disparate. Aberdeen receives about £1,500 a head, whereas the figure in Glasgow is nearer £2,000, and that is only the lump sum. In addition, there are a host of little pockets of money and special funds, few of which find their way to Aberdeen. It is high time that we had proper accounting and scrutiny of such budget details. In the past, cosy arrangements were made between the Convention of Scottish Local Authorities and the Scottish Office, which to some extent have continued with the Executive. I do not deny that COSLA should have a role, but the public have a right to know on what basis the financial allocations are made.

I hope that the local government finance review will allow proper scrutiny of such matters and of the extra moneys that are allocated, in particular on the basis of deprivation, for which we do not have a clear-cut analysis of where the money goes or of what outcomes will be delivered. If significantly disparate per capita allocations are to continue to be given to local authorities—and particularly the authority in the area that I represent—we are entitled to know why that happens. The minister might wish to address that as part of the overall local government finance review.

I welcome Wendy Alexander's interest in the Scottish Green Party manifesto's financial plans. I commend particularly the idea of integrating the tax and benefits systems, which is attracting increasing support from the whole political spectrum. A key way of doing that would be through a citizens income, but that would take us to a discussion of United Kingdom tax and benefits. If we had an independent Scotland, today's debate would be about such tax and benefits, rather than merely about spending. I thank Wendy Alexander for bringing that idea to the chamber's attention. I hope that when the Parliament has full powers, we will be able more adequately to discuss integrating tax and benefits.

If, under a Green Administration, the Parliament and the nation became independent, would that Administration use its powers to renationalise utilities? Would it provide compensation for part of that nationalisation?

We believe that the most effective way to deliver basic utilities such as electricity is through state provision. Only at question time this afternoon, we heard examples of problems that people throughout Scotland face because of the actions of private utility companies that are more interested in profit than in public service. We would move towards a state-controlled rather than a private situation. Achieving that would involve a difficult process, given the mess that the Tories made of utilities, as they did of so many other matters. It is inevitable that some compensation would have to be offered to put a decent system back in the state's hands, but that would be to the long-term benefit of everybody in Scotland. Anyway, we are supposed to be discussing the budget.

Another day, another budget debate. I welcome again the opportunity to talk about Scotland's spending plans. As I said, I wish that today's debate was not just on spending but on tax. That might have attracted rather more interest among members.

Let me repeat the point that I made in the stage 1 debate, which was not adequately answered then, although it goes to the heart of the commitments that the Executive made in the partnership agreement. Will the Deputy Minister for Finance and Public Services accept that, despite the claim that Jack McConnell made way back in February 2002, the Executive has failed to ensure that all spending is assessed for its impact on the environment and on sustainable development? If the Executive continues to ignore that question, we will view that as an admission of failure on the Executive's part.

During a previous debate on the Finance Committee's report on the budget process, Des McNulty said that insufficient information was supplied in the budget to scrutinise sustainable development and other cross-cutting themes. There is plenty of evidence out there that the Executive is failing in those budgets, but we have not been given sufficient information to assess what the Executive is doing on such themes in the budget that is before us today.

Although there is much to commend about the transparency of the Parliament's budget process, our Executive is still committed to road building and the climate damage and environmental destruction that comes with that. The budget does not give us the evidence to assess what the Executive is doing to meet its commitments on sustainable development. I believe that the Executive is failing. I believe that the evidence that is coming in from the wider Scottish environment shows that the Executive is failing. However, today's budget does not give us the evidence to make a proper assessment of that.

As Tavish Scott reminded us, we are about to embark on the budget process all over again. For those of us who have been here for some years, the process can seem like an endless treadmill. However, the minister was quite correct to highlight the transparency of the process and the interaction between the Scottish Executive and the Parliament's committees. He was correct to say that that is something very special.

Tavish Scott also referred to our commitment to higher education, which is an important commitment that I am proud of. Of particular interest to my constituency is the investment in electronic infrastructure. Linked to that is the innovation idea, which Jim Wallace has been pushing forward, which is all about industry and commerce linking with universities.

In response to an intervention from Tavish Scott, Jim Mather recognised that there has been significant progress on transparency along the lines that I have mentioned. We are moving in the right direction and I welcome that.

Brian Monteith made some interesting comments on council tax and the manufacturing sector. I well remember that, after I was elected to the Highland Council in 1995, we found that Michael Forsyth's cutbacks swung heavily against us. At that time, council taxes rose due to Conservative action. On manufacturing, I can only remind Brian Monteith that his party did more damage to manufacturing than any other in recent history.

As Elaine Murray highlighted, we must not forget that Opposition parties have a duty to provide alternatives. Attempts have been made to do that today, but the results have perhaps been mixed.

Elaine Murray was also correct to highlight the importance of outcomes. The money goes in one end of the tube, but what comes out at the other end? I know that ministers and all right-thinking people take an interest in that, but let us be honest about the fact that we must still improve the process. With the best intentions, we are not always quite certain that the money is hitting the desired targets.

Stewart Stevenson made a characteristically thoughtful speech, which I enjoyed—at least I enjoyed that percentage of it that I understood. However, Stewart Stevenson is the economic ballast in our "University Challenge" team.

Jeremy Purvis is in some degree of trouble with me after expressing his agreement with Brian Monteith's comments. I remind Jeremy that I am the deputy whip of the Liberal Democrat party, so we shall talk about the matter later. However, he quite correctly highlighted the question that the Conservatives will not answer: which services and functions would the Conservatives cut? We know from Murdo Fraser's reply to me last week that Scottish Enterprise would be one of the first targets to be clobbered if, to use Wendy Alexander's idea, there were to be a Conservative finance minister.

Ted Brocklebank—who, I am sorry to see, is not in the chamber—got himself into a slight mess. He went on about the growth in the public sector work force and the extra money that is coming to Scotland. What was he talking about? That growth comes from having more of the very policemen that the Conservatives shout for. It comes from the extra classroom assistants, the social workers and the teachers who make a difference to the poorest people in this country. None of us should be ashamed of that fact. On the subject of the extra cash that is coming to Scotland, I say thank you and amen to that.

We heard robust and fiery contributions from Wendy Alexander and Brian Adam. I have just heard from our good friend in the Greens. It is no accident that, on the "University Challenge" team, Robin Harper is the expert on myths and fairy tales—tales of the unreal. If he talked to my constituents about not building roads and not investing in infrastructure, he would get a very dusty answer indeed. Some of us do not live in utopia; some of us live in remote rural areas where we depend on investment. I value the investment from the Scottish Executive and I whole-heartedly commend the bill to Parliament.

In my role as convener of the Finance Committee, I thank the clerks and the members of the committee for the tremendous work that they have done on the scrutiny of the budget.

We are making significant progress on improving transparency along the way, which is a cross-party goal on the committee, because we all feel that it is important.

We have had an interesting debate. I noticed that Stewart Stevenson used the Official Report of the Finance Committee as the basis of his contribution today. Stewart Stevenson has a reputation as a bit of an anorak on such matters. However, he is welcome to come to the Finance Committee—we welcome people should they wish to come along to our discussions. We have had an interesting few months, not only in considering the budget process, but in some of the other work that we are doing to scrutinise the Executive's finances.

Wendy Alexander made reference to the fact that the Scottish Socialists are not present. I pick up Ted Brocklebank's analogy of the mouse that did not roar. Politics rests on finance. One cannot do anything in politics without making decisions about budgetary matters. It is incumbent on every political party to participate, to offer its ideas and suggestions and to involve itself in the budgetary process. It is a great shame that one party has chosen to absent itself from the process.

Does Mr McNulty agree that Wendy Alexander painted a vivid picture of what would happen to the budget process if the Opposition parties had been elected to power, but failed abysmally to mention that, under the existing coalition, a quarter of a million senior citizens live below the poverty level and we are selling people's houses to pay for their residential care? Wendy Alexander calls that success.

I believe that the Executive has made significant progress in recent years to provide better services, particularly for our elderly people. I point to three obvious examples. One is free concessionary travel, which has been appreciated by my elderly constituents. The second is the introduction of free personal care, which is in advance of what is being done elsewhere. The third is the massive investment that has been made in the health service, which has benefited older people in particular. When they fall ill in Scotland, older people have a better chance of receiving better treatment than they would have anywhere else in the UK or in many other places in Europe.

Wendy Alexander made the good point that, if one compares growth rates in different parts of Europe using the statistics that we have now, Scotland bears up well. I hope that Jim Mather will now stop saying things such as:

"Unless we see policies in place that are fair to Scotland, such as the powers to compete, Scotland will remain on a disastrous trajectory that shames the Scottish Executive."

I hope that he will stop saying things such as:

"low growth which occurs as a direct result of our parliament not having the power to compete, results in higher real unemployment."

Our unemployment situation compares very favourably with the situation elsewhere in Europe and is the lowest that it has been for a generation. We are doing tremendously well.

We are doing much better on economic growth than people, including myself, thought. Those are all positive aspects that we should celebrate. We should also work out how we can take them further. That is what the budget debate should be about. It should not be about making inappropriate comparisons. We should be asking how we can gear our resources within the budget to ensure that we improve on the good growth levels that we have achieved.

May I just say in conclusion, Presiding Officer—

No, you must finish now.

Brian Monteith referred to a 42 per cent increase in capital—

Mr McNulty, there is no time to introduce new material. I now call Murdo Fraser to close for the Conservatives.

On a point of order, Presiding Officer.

There really is no time, Mr Monteith, but if you insist.

Mr Stone made a remark about a Conservative member. Can I—

May I anticipate your point by saying that two members—Mr Brocklebank and Mr Stone—who spoke in the debate are now not present for the closing speeches, which is regrettable given that we have a practice in the Parliament of being present for the end of debates to hear the closing speeches, with which I would now like to proceed.

I was just reflecting on "The Great Escape", to which Wendy Alexander referred. She may remember that the fate that befell the escapees at the end of the movie was not a happy one. Of course, if Andy Kerr is Steve McQueen, I wonder who Wendy Alexander considers herself to be—perhaps Gordon Jackson, or Richard Attenborough, or the camp commandant. We can reflect on that.

The debate has been good and I agree with something that Jeremy Purvis said, which I am sure will do him even more damage with the Liberal whips. I agree that we need more time to discuss the financing of the Executive's budget, which is a fundamental matter, and I am sorry that more time was not available. However, I will pick up on a number of important points in the brief time that I have.

First, there is the question of the business growth figures, to which Brian Monteith, Stewart Stevenson and others referred. What we have seen is a miraculous turnaround. If the figures are to be believed, they mean that Scotland has had higher growth than the G7 countries. I am sure that that will come as a great surprise to many people in the business community, because they do not seem to have experienced such growth. Stewart Stevenson referred to other statistics, such as those on bankruptcies and VAT deregistrations, which suggest that the recalibrated figures for business growth must be looked at rather closely.

Even if we accept the business growth figures as correct, they disclose that the service sector is booming and the manufacturing sector remains in serious trouble. However, the service sector is booming on the back of a credit explosion and rising house prices. As my colleague Ted Brocklebank said, the real expansion has been in the public sector. Fifty-two per cent of the Scottish gross domestic product is consumed by the public sector. That situation cannot be sustainable in the long run, if we want a growing economy. I heard Professor Donald MacRae, of Lloyds TSB, saying this morning that we must recognise that we have low growth in Scotland and that there is nothing to be complacent about.

Let me touch on the question of council tax increases. Today we have seen, across Scotland, council tax increases that average 5.2 per cent, which is substantially ahead of inflation. That has been the continuing trend over the past few years. There is a great deal of unhappiness about the council tax and its perceived unfairness. I have some sympathy for people on low incomes—perhaps they are retired—who live in a large property, but do not wish to move. Because their council tax is assessed on the value of their house, they must pay a sum that is not proportionate to their income. For many people, of course, the only fair tax is one that somebody else pays.

A great deal of unhappiness is generated not so much by the structure of the council tax as by the increases. Where Conservative councillors across Scotland have been able to offer an alternative budget, their projected increases would have averaged 2.8 per cent compared with 5.2 per cent, which would be an average saving of £46 per annum for band D householders across Scotland. Therefore, Conservative councils would be offering lower council tax charges than are current administrations.

The budget is a missed opportunity to make a difference to the economy of Scotland and a missed opportunity to tackle council tax bills. Unless the Executive does better next year, the real great escape that we will see will be yet more of our people leaving Scotland to seek work and careers elsewhere.

Earlier, this debate managed to achieve the very rare feat of clearing the gallery totally. I notice that people are now beginning to come in, but I think that that has more to do with the members' business debate that follows.

I shall start with the point that Murdo Fraser ended with, on the council tax. It is not just the party that is in power, whether in the council or in the Parliament, that is the problem. It is clear that the problem is with the tax itself. As members have pointed out, all the coverage tomorrow will be about decisions and debates that have taken place in other chambers throughout Scotland; there will be no coverage of the debate in this chamber.

We all know that the council tax is unfair, but when it was lower and equivalent to a smaller percentage of disposable income, that unfairness was acceptable to most people because of the relative convenience and simplicity of the tax. We have now moved far beyond that situation. The proportion of many people's disposable income that is taken by the tax, particularly when annual increases are far above the rate of inflation, means that the unfairness has reached a stage at which it can no longer be tolerated. The Parliament will have to address that issue, because it affects us all and speaks badly of us all.

Jeremy Purvis made a point about something that I said last year. I did indeed say that the budget documents had improved but, as both Jim Mather and Wendy Alexander said, we need to continue to improve our statistics and there is lots of information that should inform our decisions that is still not available to us. I was glad to see that the Official Report of the stage 2 debate was available this time; I complained last year that it was not available, so I am glad that the minister has responded to that point. However, I also asked for a date to be put on the budget documents. If one has a pile of them, as some of us anoraks do, it is sometimes difficult to remember which is which, especially in a year when there may be a spending review and documents are coming out continually. Including a date to say when a document was published should not be beyond the wit of the Executive.

I return to something else that I have mentioned before: business rates. I am surprised that business rates have not been mentioned in this debate, which must be a first. I presume that that is because Mr Ewing is not here. We have heard the argument that our rateable values are lower and that, because our rate poundage is higher than south of the border, that means that, by and large, businesses are in the same position both south and north of the border. However, there are a significant number of businesses to which that does not apply and whose rateable values are fixed on a harmonised basis north and south of the border. For example, chemical plants, small hotels, pipelines and, I believe, even British Telecommunications' fibre optic cable are rated in that way, so it costs people more to run such businesses north of the border than south of the border. Perhaps that is one of the reasons why broadband is a bit of a problem in Scotland.

On Tavish Scott's comments about the 70 per cent target that has been achieved, I have to say that, with one or two exceptions—and I can understand why people are pleased about that—the achievement of that target has nothing to do with anything that the Executive has done or anything in the Executive budget. The target has been achieved mostly because of commercial decisions on the part of the companies that provide the broadband fibre in the first place.

In relation to future decisions on the budget, I re-emphasise the conclusions of the Enterprise and Culture Committee's Scottish solutions report on university funding, in which we said that

"it will be essential to lever additional funds into the sector"—

that is the higher and further education sector—and that

"we believe that significant Executive funding will also be necessary."

Today, we received the Executive response to that report, which is encouraging in part. However, it just says:

"We are committed to ensuring that Scottish higher education maintains its competitive edge."

I simply emphasise the need to deliver on that commitment, which will mean real money being put into the sector.

The fact that we have so many debates on the budget means that we must consider how we structure those debates and what we say in them, otherwise we get speeches that are simply gratuitously offensive, like Ms Alexander's.

I conclude, as always, by saying that we are debating only part of a budget. There is no income side to the budget that we debate and there are huge slices of expenditure in this country—defence, foreign affairs and social security—that we do not debate. I look forward to the day when we can discuss a complete Scottish budget in this chamber.

On a point of order, Presiding Officer, I gather that I was admonished during my absence from the chamber. I would like to point out that, while members were discussing spending billions of pounds, by necessity, I had to spend a far smaller sum. [Laughter.]

There is no answer to that. I call Tavish Scott to respond to everything else in the debate.

I take the point, Presiding Officer.

I begin by thanking my officials, Richard Dennis and Richard Wilkins, who put in a huge amount of work on this side of the equation in respect of the Budget (Scotland) Bill. I thank Des McNulty and all his colleagues on the Finance Committee for the constructive assistance that they brought to the process. I also thank my colleague Peter Peacock for pointing out that whatever I say this afternoon will get no coverage whatsoever. With that assurance, I might depart from my written text.

I want to pick up on the points that were made this afternoon about the Budget (Scotland) Bill. To Elaine Murray and Stewart Stevenson—and to Alasdair Morgan in relation to time-series data—I reiterate what I said in my earlier remarks and in front of the Finance Committee on a number of occasions. We will work strongly on that area, as we will on the clarity of the annual expenditure report and the introduction of a form of reporting that we hope will be more easily read and understood. That is an important piece of work. I say to Stewart Stevenson in particular that the subject of the prisons estate was raised at the Finance Committee on Tuesday. He might wish to reflect on the Official Report of that meeting.

Mr Ted Brocklebank has returned to the chamber. He made an allegation about the GDP figures that were announced yesterday; I think that the word he used was "hogwash". I hope that he can substantiate that allegation in relation to the points that he raised.

Will the minister give way?

In a minute.

One could quote from any number of publications, but I will quote from The Herald. Does Mr Brocklebank not accept that

"Scotland beat the UK quarterly growth rate in 10 of the last 23 quarters",

or that

"The Scottish economy also punched above its weight in 16 of the last 23 quarters, producing more goods and services than would be expected for a country of its size"?

The figures are in line with accepted European Union and UK standards. If Mr Brocklebank does not accept them, he should say very clearly why he does not.

I refer the minister to what I actually said, which was that those business people to whom I had spoken earlier this morning had claimed that the figures appeared to be hogwash. The figures were dramatic new figures. I think that if the minister checks the Official Report, he will find that that is what I said.

I reiterate my point. I am sure that Mr Brocklebank would like to put that on the record. He can write to the Minister for Enterprise and Lifelong Learning or, indeed, to any other minister and state the exact nature of his allegation.

Brian Adam made a point about local authority funding. He will accept that local authority funding in the coming year will rise by 6.5 per cent. Indeed, we debated the subject last week. I do not accept the argument that there is nothing that the Parliament can do to scrutinise local authority spending. I am sure that Brian Adam would not accept that argument either, given that he sat on the Finance Committee for some time. There is nothing to stop any parliamentary committee, particularly the subject-based committees and the Finance Committee, from looking at local authority funding.

I congratulate Chancellor Ballard on the honesty of his position on renationalising all the public utilities. I give him 10 out of 10 for honesty. I hope, however, that he and his party accept that the fact that there is a Cabinet sub-committee on sustainable Scotland, which is chaired by the First Minister, illustrates the seriousness with which the Administration takes the subject and its commitment to strategic environmental assessment.

Will the minister give way?

No. I have answered the point and I want to deal with other points that were raised in the debate.

I agree absolutely with what Des McNulty said in his response to John Swinburne's intervention on older people in our communities. I do not accept Mr Swinburne's constant protestations that the Administration does nothing for older people. The one issue that I would add to Des McNulty's list is the central heating investment. I believe that that is an important theme of the Scottish Executive expenditure and one that is widely welcomed in many of our communities throughout Scotland.

I do not accept what Mr Mather said in his speech. I hope that I quote him accurately when I say that he talked about "shortcomings and omissions" in reporting procedures. Given that Mr Mather has sat on the Finance Committee since he entered the Parliament, I hope that he can clarify that. It is helpful for us to be precise about the language that we use. In my view, Mr Mather was very loose in his usage of language. He also talked about celebrating "spending for spending's sake". He should try that line on Mr MacAskill or on some of his other colleagues on the SNP benches.

Mr Monteith and Mr Fraser made points about the council tax. Uncharacteristically, Mr Fraser missed out Scottish Borders Council. He did not mention that council's 5.4 per cent increase when he talked about Tory influence—I wonder why.

The Conservatives do not appear to want to accept that the Administration has frozen business rates and introduced an increase in water rates that is below the rate of the retail prices index and a new low-user water tariff for 20 per cent of Scottish firms. I presume that those are all things that the Conservatives—given the Reaganomic trickle-down nature of their modern approach under Mr Howard—would oppose. Of course, the Conservatives have a clear policy to cut Scottish Enterprise, they would cut transport and they would cut higher education. However, they would introduce something—health vouchers. I am sure that that would be tremendously welcomed by many people.

The only point on which I agree with Mr Fraser is the need to avoid complacency, which is exactly what the Deputy First Minister did yesterday when he responded to the GDP figures. We accept that point.

At today's First Minister's question time, the SNP leader quoted local authority council tax rates, yet funding the SNP's spending commitments would increase the requirement for taxation. What will be cut? Will there be cuts in other areas of the Scottish Executive budget? Some SNP members are nodding away furiously. The SNP never identifies the cuts. Does Mr Mather speak for the SNP on taxation, or is it Mr MacAskill? Is it cuts or is it spending? We never get a straight answer to that question. Does the SNP want Irish taxation levels or Finnish spending levels? We deserve an answer. Which one will it be—free by 93, more by 2004 or heaven by 2007?

This Administration's financial plans for 2004-05 are responsible and will deliver an ambitious programme. The budget delivers value for money for Scotland and helps to ensure that the people's money is allocated to the people's priorities. This partnership Government is investing in the long term, investing to grow business and investing for the future of Scotland. I commend the Budget (Scotland) Bill to Parliament.